5.7 Investment choices – Derivatives.

Derivatives are financial instruments that originate from, reference from or variable by underlying assets. Derivatives are generally valued based on underlying asset or other underlying variable.
Underlying assets may be financial instruments such as foreign exchange rate, bill shares or bonds, etc. may be goods or other assets such as rice, oil, cars, etc., as the home of derivatives that are specified to refer any assets.
Examples of financial derivatives that occur in everyday life are the contracts to buy and sell homes and land for sale. Usually home and land sale agreement is made by the buyer will deposit to the seller of a home, such as cost of 3,000,000 Baht, buyers have agreed to deposit 500,000 Baht on contract and will be delivered as a future home in six months, for example. Then the buyer and will be conducted to borrow money from banks to bring home and land. If the bank approved loans, buyers will pay for home-based contract. If buyers can not borrow from the bank, they will not be able to follow the contract and the seller will hold the deposit or if the buyer can sell the contract to others, the buyer will receive the deposit back, which depending on the price the buyer can sell the contract to purchase it sells. If house prices have increased during the six-month contract, such contract value may also increase. If home prices have dropped in price during the six-month contract, such contract value may lower.

Contract to buy and to sell the house and land is a type of derivative because such agreements are counted as one of the derivatives, it is agreed in advance to trade the house in the future, by some depositing in the present and will pay the rest of the house and land price in the future. The contract price may increase or decrease if the house and land as underlying asset increase or decrease in value during the contract.
The above example of derivatives is a simple one. There are two main derivative types are recommended in this case: the “future” and “option”.

There are Investment tax burden of TFEX market when the investors earning individually and in a manner similar to the tax burden on investment in equities.